More good job news! Unemployment claims fell sharply last week

The number of newly laid-off workers seeking unemployment benefits fell more than expected last week to the lowest total in a month, a hopeful sign the job market may be improving.

The Labor Department said that first-time claims for unemployment insurance dropped by 43,000 to a seasonally adjusted 440,000. Wall Street economists expected a smaller decline of 15,000, according to a survey by Thomson Reuters.

A Labor Department analyst said the decline largely reflects the end of administrative backlogs in California and other states that had elevated claims in the previous three weeks. The backlogs represented claims that had built up over the Christmas holidays.

The winter storms that have pounded the Mid-Atlantic took place after last week's claims were filed, the analyst said. If they have an effect, it won't be evident until next week's data.

The four-week average fell by 1,000 to 468,500, the first drop after three weeks of increases.

Claims are now close to the low levels they reached in late December, when claims dropped to their lowest point in nearly 18 months.

Still, jobs remain scarce. The Labor Department said last week that the unemployment rate fell to 9.7 percent from 10 percent, but most analysts expect it to remain near 10 percent through the end of the year.

The number of people claiming benefits for more than a week, meanwhile, fell by nearly 80,000 to 4.5 million. That was a steeper decline than expected.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

Nearly 5.7 million people were receiving extended benefits in the week ended Jan. 23, the latest data available, down from nearly 5.9 million the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.

Among the states, Pennsylvania reported the largest increase, of nearly 10,5000, which it attributed to layoffs in the construction and service industries. Illinois, North Carolina, Georgia and Missouri had the next largest increases.

New Jersey reported the largest drop, of 1,819, which it said was due to fewer layoffs in services. Kansas, Connecticut, Virginia and Puerto Rico had the next largest drops.